City of Miami Gardens v. City of N. Miami Beach

346 So.3d 648

CITY OF MIAMI GARDENS, etc., Appellant,

v.CITY OF NORTH MIAMI BEACH, etc., Appellee.

No. 3D21-865

District Court of Appeal of Florida, Third District.

Opinion filed July 20, 2022

Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., and Eugene E. Stearns, Matthew C. Dates and David T. Coulter, Miami, for appellant, City of Miami Gardens.

Shubin & Bass, P.A., and John K. Shubin, Miami, Katherine R. Maxwell and Ian E. DeMello, Miami, for appellee.

Before FERNANDEZ, C.J., and LINDSEY and MILLER, JJ.

FERNANDEZ, C.J.

Plaintiff the City of Miami Gardens appeals the trial court's "Final Order Granting Defendant's Motion to Dismiss Amended Complaint with Prejudice." We agree in part with Miami Gardens and thus reverse in part, affirm in part, and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

The Norwood Water Treatment Plant ("Norwood Plant") is located within the geographical boundaries of the City of Miami Gardens ("Miami Gardens"). Before Miami Gardens was incorporated on May 13, 2003, as well as after, the City of North Miami Beach ("NMB") owned the Norwood Plant. NMB operated the Norwood Plant, which treats and distributes water to Miami Gardens, as well as consumers in Miami Gardens and NMB.

On January 7, 2003, NMB adopted an ordinance pursuant to section 180.191, Florida Statute (2003). In Ordinance Number 2002-25, NMB increased the surcharge from 15% to 25% for customers residing outside NMB's corporate limits that are served by NMB's water and sewer utility, the Norwood Plant.

On May 22, 2017, NMB entered into an agreement with a private contractor from Colorado, CH2M Hill Engineers, Inc. ("CH2M"), who took over the day-to-day operations of the Norwood Pant.¹ The agreement provided that CH2M was to operate, maintain, repair, replace, and manage the Norwood Plant. According to the agreement, NMB retained ownership of the Norwood plant, retained the right to the revenues generated by the plant, agreed to pay CH2M a fixed fee, and retained the "sole power, authority and responsibility for establishing policy and setting rates, charges, rents, surcharges and other amounts payable."

After the Norwood Plant was privatized in 2017, NMB continued to charge Miami Gardens and Miami Gardens’ consumers, both residents and business entities, the 25% surcharge on water distributed from the Norwood Plant pursuant to section 180.191(1)(a), Florida Statutes (2003). NMB consumers are not charged this 25% surcharge.

As a result, in December 2018, Miami Gardens, on behalf of itself and similarly situated residents or business entities located within the city of Miami Gardens that NMB billed and continued to bill for water services, sued NMB to cease charging the 25% surcharge to Miami Gardens’ consumers. In a two-count class action suit seeking to represent the Miami Gardens consumers who purchase water from the Norwood Plant (as Miami Gardens is a property owner within the municipal bounds of Miami Gardens and pays for water utilities used on its properties), Miami Gardens sought, in Count I, a declaratory judgment seeking the answer to three questions:

(a)If [NMB] assigned to a private contractor all operational responsibility for water utilities it owns that are located outside its geographical bounds, is North Miami Beach still "operating" those water utilities?

(b) If [NMB] is no longer "operating" water utilities it owns that are located outside its geographical bounds, may [NMB] lawfully charge a 25% surcharge on water provided to consumers within the City of Miami Gardens?

(c) Does Section 180.191, Florida Statutes provide for the imposition of a 25% surcharge per billing cycle by [NMB] upon the City of Miami Gardens and the members of the class for water drawn from the aquifer located within the boundaries of the City of Miami Gardens which is processed in and never leaves the boundaries of the municipality?

Miami Gardens further sought an injunction on the imposition of the 25% surcharge to Miami Gardens consumers, as well as attorneys’ fees and costs, as provided in section 180.191, Florida Statute (2003). In Count II of the complaint, Miami Gardens alleged a violation of section 180.191 because it claimed NMB was not operating the water utility as required by the statute and requested a refund of all surcharges unlawfully collected by NMB after the Norwood Plant was privatized.

The action was abated for six months for the parties to resolve the dispute. After no resolution, the parties returned to court.

In August 2019, NMB filed a motion to dismiss Miami Gardens’ complaint. NMB argued, in part, that Miami Gardens’ claims were barred by the statute of limitations. Miami Gardens responded, after which NMB filed a second motion to dismiss. NMB made the same arguments as before but also added that Miami Gardens’ claims were barred by sovereign immunity and the voluntary payment doctrine and that the class allegations were insufficient.

The trial court held a hearing on the motion to dismiss. NMB contended that if the complaint was allowed to remain pending or an amended pleading was authorized, a more definite statement of damages and scope of relief was required. The trial court stated it did not see a reason to dismiss Miami Gardens’ complaint and denied NMB's motion. The trial court then asked Miami Gardens to clarify the timeframe of its claims for monetary relief by amending its complaint. In February 2020, Miami Gardens complied with the trial court's request when it filed its Amended Class Action Complaint. In addition to re-alleging the first two counts it alleged in its initial complaint, Miami Gardens alleged a third count, this one for a refund pursuant to section 180.191.

Thereafter, the action was briefly stayed for NMB to appeal the trial court's order denying NMB's motion to dismiss. On July 7, 2020, this Court dismissed the appeal as moot because Miami Gardens had filed an amended complaint. City of North Miami Beach v. City of Miami Gardens, 306 So. 3d 211 (Fla. 3d DCA 2020). That same day, NMB filed a third motion to dismiss. This time, NMB argued that 1) Miami Gardens’ monetary claims were barred by sovereign immunity, 2) Miami Gardens’ claim that the surcharge could never be applied lawfully to consumers in Miami Gardens was legally insufficient, and 3) this same claim was time-barred.

Thereafter, while the lawsuit was pending, NMB filed a Suggestion of Mootness in October 2020. NMB argued that the case became moot when NMB terminated its agreement with CH2M on August 6, 2020 for operation and maintenance services related to NMB's water utility. It further argued the case became moot when in response to this litigation, NMB notified Miami Gardens on October 30, 2019 that NMB would waive the 25% surcharge for Miami Gardens itself, although not for the Miami Gardens residential and business consumers, effective October 2019. Attached to the Suggestion of Mootness, NMB filed an unauthenticated letter from NMB's City Manager to CH2M. The letter from NMB's City Manager to a Mr. Andrew Appleton at CH2M stated the following:

Pursuant to the provisions of Section 5.3 of the Agreement, please accept this letter as written notice that the City of North Miami Beach, by and through its City Commission, has elected to terminate the Agreement for convenience.

In accordance with the provisions of Section 5.12 of the Agreement, the City expects your company to make fully available its managers and employees performing services at the Utility Facilities on a month-to-month basis for a period of six (6) months from the date hereof [August 6, 2020] to continue to perform all of the Services contemplated in the Agreement and the Succession Transition Plan agreed upon by the parties. Your company will be compensated in accordance with Section 5.12.

In view of the fact that there is much to accomplish to ensure a successful transition, I respectfully request a meeting as soon as practicable to discuss the implementation of the transition.

Thank you for your consideration in this matter.

On March 17, 2021, the trial court heard NMB's latest motion to dismiss. At the end of the hearing, based on the materials submitted and arguments made by counsel, the trial court granted NMB's motion for dismissal. Thereafter, in its order dismissing the amended complaint with prejudice, the trial court specified that it: 1) dismissed as moot the portion of Count I seeking a declaration that NMB is not authorized to impose a 25% surcharge based on the allegations in Miami Gardens’ complaint because NMB terminated the agreement with CH2M, thus Miami Gardens no longer pays the 25% surcharge; 2) dismissed the remainder of Count I as legally insufficient because the portions of Count I seeking a declaration that NMB's surcharge is unlawful based on the location of NMB's water utility is not supported by the plain language of section 180.191(1) ; 3) dismissed Count I seeking declaratory relief and Count III seeking a refund related to the location of the water utility because Miami Gardens brought the action fifteen years after Miami Gardens was incorporated and sixteen years after NMB adopted the 25% surcharge ordinance, thus it was barred by the four-year statute of limitations in section 95.11(3), Florida Statute ; and 4) dismissed Counts II and III under the doctrine of sovereign immunity. This appeal followed.

Miami Gardens raises four issues on appeal, three of which have merit. Miami Gardens contends that the doctrine of sovereign immunity does not bar its claims; the trial court erred in dismissing the entire amended complaint for failure to state a cause of action; and its claims in Count I and II based on its contention that NMB was not authorized to impose a 25% surcharge while it was not operating the Norwood Plant are not moot. We agree in part with Miami Gardens.

"A motion to dismiss raises a question of law as to whether the facts alleged in the complaint are sufficient to state a case of action." State v. Beach...